Interest on High Yield Savings vs Money Market

Bob. Member ✭✭✭✭
edited April 2023 in The Water Cooler

I have a high yield savings and a money market account at the same online bank. I had always thought that the interest rates paid were the same, but I looked closely and the MM is .25% higher than the OSA account! If anything. I would have thought the other way around. Why would the money market be higher??

So, I am trying to figure out what is best for me:

  1. Do MM rates fluctuate more than OSA? If not, I should move my money.
  2. If I transfer (same bank) will the accrues interest in the closed account post to the other in the next period?
  3. Any reason you can think of to keep both open? MM has better features and if higher interest, I can't see one.



  • Ps56k2
    Ps56k2 SuperUser ✭✭✭✭✭
    edited March 2023

    QWin - R54.16 - Win10

  • Bob.
    Bob. Member ✭✭✭✭

    Thanks. Will check it out.

  • Bob.
    Bob. Member ✭✭✭✭

    Afraid not much there to answer my questions. I am NOT confusing a money market fund with money market account, btw. And I think most pros and cons have been pointed out many places. For me, no cons on the money market UNLESS it fluctuates more often and a wider swing. But I still cannot fathom why it would be higher than the high yield savings.

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭

    Here is a comparison of savings accounts vs money market accounts vs money market funds.

    QWin Premier subscription
  • Bob.
    Bob. Member ✭✭✭✭

    Thanks Jim. Got all that.

    What I don't got :)is why MM would have higher interest than OSA at the same bank. Logic trells me just the opposite. And if MM is likely to fuluctute more or more often than OSA. If not, I cannot see a reason to keep the OSA.

    Perhaps that clarifies my confusion. Would you not expect OSA to pay higher interest than MM with debit card, checks, etc at the same bank?

  • Rocket J Squirrel
    Rocket J Squirrel SuperUser ✭✭✭✭✭

    Interest rates are in a strange state right now. The yield curve is inverted, meaning that short-term fixed-income returns are higher than long-term.

    I just extended my bond/CD ladder today, and this is what the yields looked like:

    3 years: 4.95%
    4 years: 4.85%
    5 years: 4.75%

    And it turns out that FDIC-insured CDs are paying more right now than corporate bonds. Everything's topsy-turvy.

    Quicken user since version 2 for DOS, now using QWin Biz & Personal Subscription (US) on Win10 Pro.

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